A report suggests one in five universal credit claimants risk falling into debt because of administrative errors.
Photograph: Alamy

A former high court judge has described universal credit as “Orwellian” because of its tendency to create and exacerbate misery for claimants even while it professes to be rescuing them from hardship.

Sir Stephen Sedley’s comments about the troubled digital benefits system accompanied a report that revealed hundreds of claimants risked falling into debt because the system had miscalculated their monthly benefit payments.

Claimants who were underpaid, or overpaid, sums amounting in some cases to hundreds of pounds a month were routinely unable to work out the correct payment, or how they could challenge the decision, the Child Poverty Action Group (CPAG) report said.

The charity criticised the “opaque” way in which individuals’ monthly benefits payments were calculated, and said the lack of information provided to claimants who wished to challenge the calculation was in some cases unlawful.

It cited the case of a working mother who was left £400 a month worse off after universal credit neglected to include a child element for her daughter or a work allowance, an error only spotted when she went to a welfare rights adviser.

Universal credit rolls six different working-age benefits into one and CPAG said this means it is difficult for claimants to unpick the different components of the payment or work out whether it is correct.

One in five of 1,110 cases gathered by the charity as part of a universal credit monitoring project involved administrative errors by the Department for Work and Pensions (DWP), which were likely to result in the claimant being paid the wrong amount.

Sedley, a former lord justice of appeal and now a visiting professor at Oxford University, said universal credit was repeatedly failing to meet its legal obligations to make it clear why a particular decision had been made, or how claimants could appeal if they thought it was wrong.

“People in need are left to guess at and grope for things which should be clear and tangible. The consequences are not limited to over- or underpayment. They feed into the stress and worry that so many people managing on low incomes experience, which in turn can affect family life for children growing up in these environments,” he said.

“There is something Orwellian about a system which is intended to alleviate hardship yet is administered in ways which generate and aggravate human misery. Whether this is happening by accident or by design is an argument for another time and place.”

CPAG said spotting errors was difficult for claimants, while universal credit helpline staff were often unable to help because they did not have access to the calculations, which had been made automatically by the digital system. It called for payments to be made more transparent and easier to understand.

The charity’s chief executive, Alison Garnham, said: “The DWP must improve the information it provides so that universal credit claimants are not floundering in the dark about their award. Clear and accessible information on how decisions are made and your right to appeal is the bare minimum we should expect from a modern benefit.”

The report cited a self-employed father with accounting experience who was unable to work out from his online statement how his payment had been calculated. “I can’t possibly see how an average person with less than an accounting degree can deal with all this stuff, because it was complicated for me,” he said.

The report concluded: “The combination of poor decision making and a system that is not transparent about how decisions have been made is causing significant hardship in people’s lives.”

A DWP spokesperson said: “More than 1.8 million claimants receive a monthly statement advising them of their entitlement, how it has been calculated and what to do if they think the payment is incorrect.

“Help is also available from work coaches, the freephone Universal Credit helpline, gov.uk and through our ‘Help to Claim’ partnership with Citizens Advice.”